A survey found that total pension fund deficits for the largest 100 public companies stood at £39.9 billion at the end of 2006, down by £20.5 billion from the level at which they started the year.
Source: Press release 27 December 2006, Watson Wyatt (020 7222 8033)
Links: Watson Wyatt press release | Guardian report
Date: 2006-Dec
Business leaders called for major changes in the remuneration of public sector workers, in order to use pay and reward as incentives to improve performance and service delivery. It also called for a cap on taxpayer contributions to public sector pension schemes.
Source: For What It's Worth? Managing public sector reward 2008-2011, Confederation of British Industry (020 7395 8247)
Links: Report | CBI press release | TUC press release | Guardian report | FT report | Personnel Today report
Date: 2006-Dec
Researchers examined the incomes individuals could expect from pension saving under the reformed pension system proposed by the government. Although the payback depended on factors such as investment performance, for a large majority of potential savers in personal accounts the payback they could expect, net of tax and benefit effects, was very positive ? £2 or more plus inflation for every £1 an individual saved could be expected by many.
Source: Elaine McCauley and Will Sandbrook, Financial Incentives to Save for Retirement, Research Report 403, Department for Work and Pensions (0113 399 4040)
Links: Report
Date: 2006-Dec
The government announced the outcome of its review of individual savings accounts. It confirmed that it would make the ISA a permanent savings vehicle. It also announced a package of reforms designed to simplify the ISA regime and increase its flexibility for savers.
Source: Individual Savings Accounts: Proposed Reforms, HM Treasury (020 7270 4558)
Links: Report | AITC press release
Date: 2006-Dec
The government published a White Paper outlining plans for a national pensions system to increase retirement saving among low-paid workers. The scheme would aim to enrol up to 10 million workers in a centralized scheme enjoying economies of scale, with compulsory employer contributions. It was designed to offer those with only small savings a low-cost alternative to personal schemes offered by the financial services industry.
Source: Personal Accounts: A New Way to Save, Cm 6975, Department for Work and Pensions, TSO (0870 600 5522)
Links: White Paper | Summary | Hansard | DWP press release | Downing Street press release | TUC press release | FSB press release | Age Concern press release | ACA press release | CBI press release | ABI press release | IMA press release | Actuarial Profession press release | EOC press release | PPI press release | Watson Wyatt press release | Consumer Association press release | Guardian report | Personnel Today report
Date: 2006-Dec
Membership of employer-sponsored defined-benefit pension schemes fell from 39 per cent to 35 per cent of all employees between 2004 and 2005.
Source: Pension Trends, Office for National Statistics (web publication only)
Links: Report | ONS press release | TUC press release
Date: 2006-Dec
A survey found that far more companies were allowing new employees to join their final-salary pension schemes than had previously been thought. Almost a third of all final-salary schemes, including schemes run by some of the largest employers, were still open to new members.
Source: The Purple Book: DB pensions universe risk profile, Pensions Regulator (01273 811800) and Pensions Protection Fund
Links: Report | Pensions Regulator press release | FT report
Date: 2006-Dec
The government published a Pensions Bill. The Bill was designed to: make the basic state pension more generous by restoring the link with earnings during the next Parliament; reduce the number of years it took to build a full basic state pension from 44 years for men (39 for women) to 30 years for everyone; simplify both state and private pensions, including simplification of state second pension and the abolition of contracting-out for private defined-contribution schemes; raise the state pension age over time from 2024 (from 65 to 66 between 2024 and 2026; from 66 to 67 between 2034 and 2036; and from 67 to 68 between 2044 and 2046); create an authority to deliver a personal accounts system which would provide people with a low-cost, simple way to save.
Source: Pensions Bill, Department for Work and Pensions, TSO (0870 600 5522)
Links: Text of Bill | Explanatory notes | Downing Street Briefing | DWP press release | Age Concern press release | Help the Aged press release | EOC press release | ABI press release (1) | ABI press release (2) | CBI press release (1) | CBI press release (2) | IOD press release | NAPF press release | Carers UK press release (1) | Carers UK press release (2) | Consumer Association press release | Personnel Todayreport | Times report | FT report (1) | FT report (2) | FT report (3) | BBC report (1) | BBC report (2) | Guardian report (1) | Guardian report (2) | Guardian report (3) | Guardian report (4) | Community Care report
Date: 2006-Nov
A discussion paper said that since 2002 compulsory annuities had no longer provided an actuarially fair pension. Annuities were a poor investment, giving returns of less than 85 per cent in present value terms.
Source: Edward Martin and Noel FitzGerald, Can 'Compulsory' Annuities Provide a Fair Pension?, Brunel Business School (01895 265585)
Links: Paper | Guardian report
Date: 2006-Nov
The government responded to a report by a committee of MPs on its alleged maladministration in respect of people who had lost their retirement income when their private occupational pensions schemes collapsed after their employers became insolvent. It ruled out any more state help for the 125,000 people involved.
Source: The Government Response to the Public Administration Select Committee s Sixth Report of Session 2005 06 'The Ombudsman in Question: The Ombudsman s report on pensions and its constitutional implications', Cm 6961, Department for Work and Pensions, TSO (0870 600 5522)
Links: Response | MPs report | Hansard | DWP press release | Guardian report | Personnel Today report
Date: 2006-Nov
A quantitative survey of employers explored attitudes and likely reactions to various aspects of personal pension accounts. 60 per cent of employers were in favour of automatic enrolment, and 65 per cent thought that a minimum employer contribution level of 3 per cent was about right or too little.
Source: Keith Bolling, Catherine Grant, Alice Fitzpatrick and Matthew Sexton, Employer Attitudes to Personal Accounts: Report of a quantitative survey, Research Report 397, Department for Work and Pensions (0113 399 4040)
Date: 2006-Nov
A think-tank report said that 5 million people claiming benefits or the working tax credit should have their savings matched by the government to the extent of 50p for every pound they saved. A matched saving scheme was the only way to support the very poorest in building up savings. A strategy was needed that combined policies to promote savings among those living in poverty with others to combat the financial insecurity associated with poverty - including improving benefit levels, reform of the Social Fund, and improved access to affordable credit and insurance.
Source: Sonia Sodha and Ruth Lister, The Savings Gateway: From principles to practice, Institute for Public Policy Research, available from Central Books (0845 458 9911)
Links: Summary | IPPR press release
Date: 2006-Nov
An article presented evidence from the British Household Panel Survey on the persistency of contributions to individual, private pensions. There was variation in persistency rates by gender, earnings, and household income. Changes in income and consumption needs (for example, becoming unemployed or the arrival of a new baby) increased the probability of lapse: but, conditional on these changes, the level of household income also mattered, suggesting that pensions might be less affordable for those on low incomes, even in the absence of shocks.
Source: Sarah Smith, 'Persistency of pension contributions in the UK: evidence from the British Household Panel Survey', Journal of Pension Economics and Finance, Volume 5 Issue 3
Links: Abstract
Date: 2006-Nov
The sex equality watchdog said that planned government pension reforms would fail to tackle inequalities in retirement saving between the sexes, and leave millions of women still living on less than men in retirement.
Source: What Women Expect: Pension reform designed for the lives they lead, Equal Opportunities Commission (0161 833 9244) and Scottish Widows
Links: Report | EOC press release | Guardian report
Date: 2006-Nov
A report examined the interaction between the proposed system of personal pension accounts, state pensions, the tax system, and means-tested benefits, in order to identify groups for whom personal accounts were likely to be suitable and those for whom they might not be suitable. A combination of career breaks and low earnings could increase the risk of finding personal accounts unsuitable.
Source: Adam Steventon, Are Personal Accounts Suitable for All?, Pensions Policy Institute (020 7848 3744)
Links: Report | PPI press release
Date: 2006-Nov
The government announced that child trust fund accounts could be rolled over on maturity into tax-free individual savings accounts (ISAs). ISAs themselves would be extended indefinitely, rather than being withdrawn from 2010.
Source: Speech by Ed Balls MP (Economic Secretary to the Treasury), 1 November 2006
Links: Text of speech | BSA press release | FT report
Date: 2006-Nov
An article set out a framework for measuring the adequacy of saving. Although the level of national saving was about 8.4 percentage points of net national income lower than that required if it were assumed that each age cohort should pay its own way, wealth holdings were considerably higher than required on the same basis.
Source: Ehsan Khoman and Martin Weale, 'The UK savings gap', National Institute Economic Review Volume 198 Number 1, National Institute for Economic and Social Research (020 7654 1901)
Links: Abstract
Date: 2006-Oct
An article examined the recommendations of the Pensions Commission, and the data and analysis on which they were based - including projections of demographic change, trends in private pension saving, and evolution of the state pension system.
Source: John Hills, 'From Beveridge to Turner: demography, distribution and the future of pensions in the UK', Journal of the Royal Statistical Society: Series A, Volume 169 Issue 4
Links: Article
Date: 2006-Oct
The government responded to a report by a committee of MPs on its White Paper on reform of pensions systems. It said that there was a broad consensus on the principles behind the reforms.
Source: Report on Pension Reform: Government Response to the Fourth Report of the Work and Pensions Select Committee,, Cm 6956, Department for Work and Pensions, TSO (0870 600 5522)
Links: Response | Hansard | DWP press release | MPs report
Date: 2006-Oct
A report examined how self-employed people planned financially for their retirement, how they made decisions about saving and retirement, and how self-employment could play a part in extending people s working lives. Some self-employed people had been in occupational pension schemes that would form part of their income in retirement; others were relying on personal pensions, some of which were expected to provide a relatively low income; and some expected the state pension to be their main source of income. Knowledge of pensions was very patchy.
Source: Roy Sainsbury, Naomi Finch and Anne Corden, Self-employment and Retirement, Research Report 395, Department for Work and Pensions (0113 399 4040)
Date: 2006-Oct
A report examined the expectations and priorities of ethnic minority pensioners and people of working age with regard to work, retirement and pensions. The labour market experiences of ethnic minority groups, including over-representation in self-employment, concentration in certain sectors of the labour market, and higher risks of unemployment and economic inactivity, created particular issues in terms of retirement planning and pension entitlement.
Source: Helen Barnes and Rebecca Taylor, Work, Saving and Retirement among Ethnic Minorities: A qualitative study, Research Report 396, Department for Work and Pensions (0113 399 4040)
Date: 2006-Oct
A report summarized the responses to a White Paper on reform of pensions systems.
Source: Security in Retirement: Towards a New Pensions System - Summary of Responses to the Consultation, Cm 6960, Department for Work and Pensions, TSO (0870 600 5522)
Links: Report | Hansard | DWP press release | NAPF press release
Date: 2006-Oct
A paper said that there were three key types of political risk facing state and personal pension schemes: those induced by demographic, economic, and purely political factors. The state scheme had been susceptible to all three types, with the result that the annual real rate of return on the second-pillar state pension (SERPS) for the average male worker had fallen from 5.1 per cent to 1.5 per cent over the previous century.
Source: David Blake, What is a Promise from the Government Worth? Measuring and assessing political risk in state and personal pension schemes in the United Kingdom, Discussion Paper PI-0409, Pensions Institute/City University (020 7040 8600)
Links: Paper
Date: 2006-Oct
An economic analysis of proposed models (set out in the pensions White Paper) for delivering new personal accounts for pension saving found that there was little to choose between them on grounds of cost.
Source: Oxera Consulting, How to Evaluate Alternative Proposals for Personal Account Pensions: An economic framework to compare the NPSS and industry models, Association of British Insurers (020 7600 3333)
Links: Report | Summary | ABI press release
Date: 2006-Oct
A new book examined the pensions 'crisis', and the lessons of history for those seeking to craft solutions to it that were both effective and enduring.
Source: Hugh Pemberton, Pat Thane and Noel Whiteside (eds.), Britain's Pensions Crisis: History and policy, Oxford University Press (01536 741727)
Links: Summary
Date: 2006-Sep
A think-tank report said that accrued public sector pension liabilities were about 1 trillion - around double the estimates published by the government. Action could be taken to make the costs transparent, so that it would be easier to make cuts in the value of the schemes.
Source: Neil Record with Philip Booth and Nick Silver, Sir Humphrey's Legacy: Facing up to the cost of public sector pensions, Institute of Economic Affairs (020 7799 8900)
Links: Report | IEA press release
Date: 2006-Sep
A paper examined the potential impact of the government's proposed pension reforms on the amount of state pension income received by individuals with characteristics similar to those seen in many black and ethnic minority households. Only people reaching state pension age after 2010 would initially see a gain from the White Paper proposals. All of the case studies analyzed could have a higher state pension at some point in retirement, even if not at state pension age. Some of the case studies had a state pension of below the guarantee credit level, even after the reforms: this meant that they were unlikely to see gains from the White Paper proposals, unless they had income other than their state pensions.
Source: Case Studies for the Runnymede Trust, Pensions Policy Institute (020 7848 3744)
Links: Paper
Date: 2006-Sep
A paper examined the potential implications of keeping the eligibility age for guarantee credit at 65 as the state pension age (SPA) increased as planned from 2024. Raising SPA would mean that low-income individuals could be worse off at age 65 than they would have been with no change in SPA.
Source: The Guarantee Credit and State Pension Age, Pensions Policy Institute (020 7848 3744)
Links: Paper
Date: 2006-Sep
Researchers examined employer attitudes to automatic enrolment into personal pension accounts. There was strong support for automatic enrolment across all types of employers, and also a general consensus that the balance of employee and employer contributions proposed by the Pensions Commission was acceptable. Employers' views on the idea of a 3 per cent minimum employer contribution were more varied.
Source: Helen Marshall and Andrew Thomas, Employer Attitudes to Personal Accounts: Report of a qualitative study, Research Report 371, Department for Work and Pensions (0113 399 4040)
Links: Report | Summary | DWP press release | NAPF press release
Date: 2006-Aug
A survey of 750 employers found that most models for delivering the government's pensions reforms could undermine existing occupational schemes. The average employer pension contributions would decrease if reform went ahead as proposed.
Source: Deloitte & Touche, Pensions Reform in the Workplace, AEGON (0131 549 6798), Scottish Widows, Standard Life, and AXA
Links: AEGON press release
Date: 2006-Aug
A discussion paper said that costs of employment had risen significantly more for members of defined-benefit pension schemes than for other employees. This had largely been as a result of falling long-term interest rates and their effect on the cost of DB pension accrual.
Source: Paul Sweeting, The Cost and Benefit of UK Defined Benefit Provision, Pensions Institute/City University (020 7040 8600)
Links: Discussion paper
Date: 2006-Aug
A literature review assessed the impact of the proposed National Pension Savings Scheme on household savings. There was strong evidence to suggest that automatic enrolment should boost participation rates in pension schemes.
Source: John Hawksworth, Review of Research Relevant to Assessing the Impact of the Proposed National Pension Savings Scheme on Household Savings, Research Report 373, Department for Work and Pensions (0113 399 4040)
Date: 2006-Aug
A paper outlined the recommendations of the Pensions Commission, and the data and analysis on which they were based - including projections of demographic change, trends in private pension saving, and evolution of the state pension system.
Source: John Hills, From Beveridge to Turner: Demography, distribution and the future of pensions in the UK, CASEpaper 110, Centre for Analysis of Social Exclusion/London School of Economics (020 7955 6679)
Date: 2006-Aug
A report examined the impact of sending out automatic state pension forecasts. People aged over 50 who received one were generally very positive: the forecast was thought to be useful by the great majority (83 per cent) of those who read/glanced at it.
Source: Karen Bunt, Courtney Leo and Jane Barlow, Evaluation of Automatic State Pension Forecasts for the Over-50s, Research Report 374, Department for Work and Pensions (0113 399 4040)
Date: 2006-Aug
A report said that the reforms put forward in the pensions White Paper would change the overall income distribution of older people very little.
Source: An Evaluation of the White Paper State Pension Reform Proposals, Pensions Policy Institute (020 7848 3744)
Links: Report | Appendix | PPI press release | Guardian report
Date: 2006-Jul
A study examined public attitudes to automatic enrolment into personal pension accounts. Participants across all groups welcomed the idea of automatic enrolment into personal accounts as a good solution to bridge the savings gap. Most participants saw an employer contribution as an important incentive to save in a personal account.
Source: Suzanne Hall, Nick Pettigrew and Paul Harvey, Public Attitudes to Personal Accounts: Report of a qualitative study, Research Report 370, Department for Work and Pensions (0113 399 4040)
Links: Report | Summary | DWP press release (1) | DWP press release (2) | Personnel Today report
Date: 2006-Jul
A report by a committee of MPs said that, on the whole, the government's proposals for pensions reform were the right way forward. They did not represent the wholesale simplification some were seeking, but they had other advantages and appeared to be feasible. They formed a sound basis for a political consensus.
Source: Pension Reform, Fourth Report (Session 2005-06), HC 1068, House of Commons Work and Pensions Select Committee, TSO (0870 600 5522)
Links: Report
Date: 2006-Jul
An interim report was published from an evaluation of the 'Saving Gateway' (a government initiative aimed at encouraging saving among people who do not usually save). There was some evidence that the SG2 accounts were leading to both an increase in the flow into cash deposit accounts and a reduction in the amount spent. However, the evidence was less clear once stocks of assets, or flows into accounts that included current accounts or investment holdings, were also considered.
Source: Carl Emmerson, Gemma Tetlow and Matthew Wakefield with Ipsos MORI, Interim Evaluation of Saving Gateway 2, HM Treasury (020 7270 4558)
Links: Report
Date: 2006-Jul
A report by a committee of MPs said that the government should help to compensate the thousands of people whose pension schemes collapsed after it failed to warn them of the risks. It backed a report by the parliamentary watchdog which found official explanatory leaflets "unclear".
Source: The Ombudsman in Question: The Ombudsman's report on pensions and its constitutional implications, Sixth Report (Session 2005-06), HC 1081, House of Commons Public Administration Select Committee, TSO (0870 600 5522)
Links: Report | BBC report | Guardian report
Date: 2006-Jul
An article said that population ageing and declining fertility meant that the state pension system was unlikely to continue to be able to deliver the existing level of pensions without some combination of a higher state pension age and a steady inflow of young immigrant workers from abroad.
Source: David Blake and Les Mayhew, 'On the sustainability of the UK state pension system in the light of population ageing and declining fertility', Economic Journal, June 2006
Links: Abstract
Date: 2006-Jun
A report highlighted the risk that employers would level down existing pension provision when required (under government proposals) to enrol staff into a scheme automatically from 2012.
Source: Quantity v Quality: Auto-enrolment and levelling down - The evidence, National Association of Pension Funds (020 7808 1300)
Links: NAPF press release
Date: 2006-Jun
A report said that fewer than half of the working population saved enough to provide an adequate retirement income.
Source: The Scottish Widows UK Pensions Report, Scottish Widows Unit Trust Managers Limited (0845 300 2244)
Links: Report | EOC press release
Date: 2006-Jun
A report presented the findings of a qualitative research project designed to look at general knowledge and attitudes towards pensions, and at responses to suggestions for change in the pension regime. General understanding about the extent of state pension provision and the way in which it was calculated was poor. Of the suggested amendments to the pension regime, an increase in the state pension age and raising taxes or increasing national insurance contributions to generate additional revenue for pensions were the least popular. Responses to raising the state pension age were "highly emotional": it was viewed as synonymous with forcing individuals to work longer (even by those who stated that the state pension age would have no bearing on when they elected to retire).
Source: Karen Bunt, Lorna Adams, Zehra Koroglu and Eoin O Donnell, Pensions and Pension Reform, Research Report 357, Department for Work and Pensions (0113 399 4040)
Date: 2006-Jun
An audit report examined the six main public sector pension schemes in Scotland, which would provide retirement benefits to about 950,000 people. It said that the level of unfunded liabilities in the schemes might be as high as 43 billion.
Source: Public Sector Pension Schemes in Scotland, Audit Scotland for Accounts Commission and Auditor General (0131 477 1234)
Links: Report | Audit Scotland press release | COSLA press release
Date: 2006-Jun
The House of Commons held a debate on the government's proposals for pensions reform, as part of consultation on the White Paper. The government called for cross-party consensus, and asked opposition parties not to try to "cherry-pick" the plans. The spokesman for the opposition Conservative Party said that he backed the call for consensus, but had some concerns about the plans.
Source: House of Commons Hansard, Debate 27 June 2006, columns 138-230, TSO (0870 600 5522)
Links: Hansard | BBC report
Date: 2006-Jun
The government rejected claims by the parliamentary ombudsman that it misled workers by encouraging them to join company pension schemes that later folded. Its response document disclosed that compensating workers who lost their pension benefits before April 2005 (which the government had refused to do) would not cost more than 100 million in any year over the next 60 years.
Source: Response to the Report by the Parliamentary Ombudsman: Trusting in the Pensions Promise , Department for Work and Pensions (020 7962 8176)
Links: Response | FT report | Guardian report
Date: 2006-Jun
A paper examined compensating wage differentials for occupational pension scheme benefits. There was evidence for "perfect" compensating wage differentials for both occupational defined-benefit and defined-contribution pension scheme benefits.
Source: Joachim Inkmann, Compensating Wage Differentials for Defined Benefit and Defined Contribution Occupational Pension Scheme Benefits, Discussion Paper 42, UBS Pensions Research Programme/London School of Economics (020 7955 6301)
Links: Paper
Date: 2006-Jun
A report said that the pension system should be made fairer for self-employed people. They should be eligible for the State Second Pension by increasing their national insurance contributions, and they should be automatically enrolled into a new, low-cost savings scheme.
Source: Serious about Saving: Improving pension provision for self-employed people, Association of British Insurers (020 7600 3333)
Links: Report | ABI press release
Date: 2006-May
A think-tank report analyzed eight alternative state pension reform options that made different trade-offs to those made by the Pensions Commission, and evaluated them against the government's five tests for state pension reform.
Source: Chris Curry and Adam Steventon, Transition Trade-Offs: Options for state pension reform, Pensions Policy Institute (020 7848 3744)
Links: Report | PPI press release
Date: 2006-May
The government published a White Paper on pensions reform. Key elements included: a new low-cost savings scheme in which employees would be automatically enrolled unless they opted out; a basic state pension re-linked to earnings by 2012; a rise in the state pension age to 66 over two years between 2024 and 2026, to 67 between 2034 and 2036, and to 68 between 2044 and 2046; and modernization of the contributory principle for the basic state pension and the state second pension, so that social contributions (eg for carers) would be rewarded equally with paid contributions. The Pensions Commission (on whose recommendations the White Paper was based) said that it represented a major opportunity to build consensus around a new and lasting pensions settlement - although the Commission had urged re-linking to earnings by 2010.
Source: Security in Retirement: Towards a new pensions system, Cm 6841, Department for Work and Pensions, TSO (0870 600 5522) | Press release 25 May 2006, Pensions Commission (020 7712 2534)
Links: White Paper | DWP press release | Hansard | Pensions Commission press release | IFS press release | CBI press release | ABI press release | EFA press release | TUC press release | Carers UK press release | Age Concern press release | EOC press release | Fawcett Society press release | Conservative Party press release | BBC report | FT report | Guardian report
Date: 2006-May
A report by a committee of MPs said that the proposals of the Pensions Commission offered a "great and unique opportunity" to reverse the decline in private pension provision and restore confidence in long-term savings.
Source: The Design of the National Pension Savings Scheme and the Role of Financial Services Regulation, Fifth Report (Session 2005-06), HC 1074, House of Commons Treasury Select Committee, TSO (0870 600 5522)
Links: Report
Date: 2006-May
A paper used a simulation model to show the cost of delaying joining a pension scheme, in terms of the higher pension contributions that would eventually have to be paid to ensure an adequate retirement income. The levels of contributions required for individuals who started saving late were so high it was questionable whether they were affordable for anyone not on a high income. The paper also analyzed the cost in terms of reduced pension of an interrupted labour market history, such as that experienced by someone who left work for a period to bring up a family.
Source: David Blake, Alistair Byrne, Andrew Cairns and Kevin Dowd, There?s No Time Like the Present: The cost of delaying retirement saving, Pensions Institute/City University (020 7040 8600)
Links: Paper
Date: 2006-May
The pensions industry regulator published a statement on how it would regulate the funding of defined-benefit schemes. It said that it would adopt a flexible approach to closing fund shortfalls: while closing shortfalls within 10 years remained a target, it would allow individual companies to extend the deadline if it jeopardized their financial security.
Source: How the Pensions Regulator will Regulate the Funding of Defined Benefits, Pensions Regulator (01273 811800)
Links: Statement | Pensions Regulator press release | Guardian report
Date: 2006-May
The pensions industry regulator said that between 150 and 300 large occupational pension schemes were at risk, due to problems of large deficits, threats to company solvency, or poorly performing trustees.
Source: Medium Term Strategy, Pensions Regulator (01273 811800)
Links: Report | Pensions Regulator press release | BBC report
Date: 2006-Apr
A paper said that governments had consistently prioritized political expediency over long-term social needs in the area of pensions policy.
Source: Hugh Pemberton, Politics and Pensions in Post-war Britain, History and Policy (web publication only)
Links: Paper | Bristol University press release
Date: 2006-Apr
A think-tank report examined the lessons for the 'National Pensions Savings Scheme' (proposed by the Pensions Commission) from the only other planned national auto-enrolment scheme, in New Zealand. It said that the government needed to reduce the level of means-testing if the scheme were to be a success in the United Kingdom.
Source: NPSS Policy and Design Choices, Pensions Policy Institute (020 7848 3744)
Links: Report | PPI press release
Date: 2006-Apr
The government's unfunded public sector pension liabilities rose by 70 billion in the year to March 2005, to reach 530 billion in total.
Source: Total Liability of Unfunded Public Service Occupational Pension Schemes as at 31 March 2005, HM Treasury (020 7270 4558)
Links: Report | Guardian report
Date: 2006-Apr
A report said that 50 per cent of the largest publicly quoted companies were theoretically able to pay off the whole of their pensions deficits within one year, using existing surplus cash flow: but at least 20 per cent were unlikely to be able to eliminate their pension deficits over a realistic timeframe.
Source: Press release 24 April 2006, KPMG (020 7311 1000)
Links: KPMG press release
Date: 2006-Apr
A paper published by the sex equality watchdog said that targeting state support at those least able to save parents, carers, and low-paid workers could deliver a pensions system which lifted people out of poverty and offered everyone the chance of an adequate income in retirement.
Source: Chris Curry and Adam Steventon, Modelling the EOC s Pension Reform Proposals, Working Paper 43, Equal Opportunities Commission (0161 833 9244)
Links: Paper | EOC press release
Date: 2006-Apr
An article said that policy-makers wishing to increase effective retirement ages needed to consider the very different circumstances of the two groups of men who had tended to retire early. At the top of the wealth distribution, early retirement had typically been influenced by private, occupational pensions. At the bottom of the wealth distribution, individuals were even more likely to be not working in their 50s: but they did not typically define themselves as retired, and drew on income support, or more usually, disability benefits.
Source: James Banks and Sarah Smith, 'Retirement in the UK', Oxford Review of Economic Policy, Volume 22 Number 1
Links: Abstract
Date: 2006-Apr
An article summarized the analysis and recommendations of the Pensions Commission report published in November 2005.
Source: John Hills, 'A New Pension Settlement for the Twenty-First Century? The UK Pensions Commission's analysis and proposals', Oxford Review of Economic Policy, Volume 22 Number 1
Links: Abstract
Date: 2006-Apr
An official Commission (chaired by Lord Turner) published its final report on the future of pensions policy. It restated its belief that the recommendations in its second report (November 2005) provided the most balanced way forward, and said that it had been heartened by the large degree of consensus which had emerged around them. The Chancellor of the Exchequer reportedly said that he accepted the principles of the Commission proposals, including the need to restrict means-testing of pensions provision.
Source: Implementing an Integrated Package of Pension Reforms: The final report of the Pensions Commission, Pensions Commission (020 7712 2534) | The Guardian, 5 April 2006
Links: Report | Commission press release | DWP press release | Downing Street briefing | Guardian report | TUC press release | EOC press release | CIPD press release | BBC report
Date: 2006-Apr
A paper said that the obstacles to women building an adequate pension were that women had lower lifetime earnings and fewer savings opportunities than men, and they lived longer. It dismissed the claim that gender inequalities were a recent phenomenon caused by rising divorce rates.
Source: Pat Thane, 'The 'scandal' of women's pensions in Britain: how did it come about?', History and Policy (web publication only)
Links: Paper | Bristol University press release
Date: 2006-Apr
A paper examined what was known about how the tax and benefit system influenced retirement saving decisions. Many people had an incentive to accumulate private pension funds prior to retirement, and some faced very strong incentives to make their pension contributions at particular times during their working lives.
Source: Richard Blundell, Carl Emmerson and Matthew Wakefield, The Importance of Incentives in Influencing Private Retirement Saving: Known knowns and known unknowns, Working Paper W06/09, Institute for Fiscal Studies (020 7291 4800)
Links: Paper | IFS press release
Date: 2006-Apr
A report proposed an alternative way to finance reform of the basic state pension. At retirement a 'universal protected pension', valued at 25-30 per cent of average earnings, would be paid: this sum would be made up of the basic state pension and a new funded pension, with both parts indexed in line with earnings. The scheme would be financed by redirecting the national insurance rebate into a new, independently administered, fund.
Source: The Chance of a Lifetime: How to pay for reforming the basic state pension, Pensions Reform Group (07776 234113)
Links: Report
Date: 2006-Apr
A report presented findings from a survey of employers carried out in 2005 to gather information on the extent and nature of pension provision among private sector organizations in Great Britain, and to collect details of recent or forthcoming changes in pension provision.
Source: Stephen McKay, Employers' Pension Provision Survey 2005, Research Report 329, Department for Work and Pensions (0113 399 4040)
Date: 2006-Mar
An ombudsman report said that official guidance on the security of company pension schemes had been "inaccurate, incomplete, unclear and inconsistent". It said that government maladministration had caused 85,000 people to lose all or part of their company pensions, and called for them to be compensated. But the government said that taxpayers should not have to bail out private schemes.
Source: Trusting in the Pensions Promise: Government bodies and the security of final salary occupational pensions, HC 984 (Session 2005-06), Parliamentary Ombudsman, TSO (0870 600 5522) | Press release 15 March 2006, Department for Work and Pensions (020 7712 2171)
Links: Report | Ombudsman press release | DWP press release | TUC press release | BBC report | Guardian report
Date: 2006-Mar
The government began consultation on proposals which would enable company pensions administrators to provide written material and make oral promotions about company pensions to employees, without needing to be regulated by the Financial Services Authority.
Source: Extending Employers Freedoms: A consultation on facilitating financial promotions in the workplace, HM Treasury (020 7270 4558)
Links: Consultation document
Date: 2006-Mar
A report said that the market for annuities appeared to function satisfactorily, and no evidence was found of monopoly pricing of annuities. But demand for voluntary annuities was low, partly reflecting the inflexible nature of annuity products.
Source: Edmund Cannon and Ian Tonks, Survey of Annuity Pricing, Research Report 318, Department for Work and Pensions (0113 399 4040)
Date: 2006-Mar
A report said that there was an emerging consensus among experts on the nature of the pensions problem, and on the need for reform of the state pension system. The pensions community wanted a simple and sustainable solution.
Source: Shaping a Stable Pensions Solution: How pension experts would reform UK pensions, Pensions Policy Institute (020 7848 3744)
Links: Report | PPI press release
Date: 2006-Mar
An article said that the 'saving gateway' scheme (for lower-income families) had encouraged participants to save, and to save regularly. In addition, it seemed to have resulted in positive psychological and attitudinal changes among a significant proportion of participants.
Source: Sharon Collard and Stephen McKay, 'Closing the savings gap? The role of the saving gateway', Local Economy, Volume 21 Number 1
Links: Abstract
Date: 2006-Feb
The pension fund industry proposed the establishment of 'super trusts' up to 20 collective, defined-contribution schemes into which workers would be automatically enrolled - as an alternative to the scheme recommended by the Turner Commission. The trust would operate on a not-for-profit basis with relatively low management charges.
Source: Press release 10 February 2006, National Association of Pension Funds (020 7808 1300)
Links: NAPF press release
Date: 2006-Feb
A survey examined employer attitudes to the proposals put forward by the Pensions Commission. It found that the majority (81 per cent) had no intention of changing their existing pension arrangements in response.
Source: Labour Market Outlook: Quarterly Survey Report - Spring 2006, Chartered Institute of Personnel Development (020 8971 9000)
Links: Report | CIPD press release
Date: 2006-Feb
Trade unions and consumer groups urged the government to reject alternatives to the Pensions Commission report proposed by the insurance and pension fund industries. They said that the average future pensioner could be more than 25 a week worse off if the government gave in to industry lobbying.
Source: Press release 27 February 2006, Trades Union Congress (020 7467 1294) and Consumers Association
Links: TUC/CA press release
Date: 2006-Feb
Investment fund managers said that, if properly implemented, with an appropriate governance structure to safeguard the interests of members, the Turner Commission s model for a national pensions scheme would enable people on low incomes, who did not already have a pension, to have professionally managed retirement savings giving excellent value for money.
Source: Implementing a National Pensions Savings Scheme, Investment Management Association (020 7831 0898)
Links: Summary | IMA press release
Date: 2006-Feb
A survey found that only 1 in 9 people (11 per cent) would trust the financial services industry to look after their pension pot.
Source: Press release 27 February 2006, Consumers' Association (020 7770 7000)
Links: Consumers' Association press release
Date: 2006-Feb
A paper critically examined the trend towards individualized choice, risk, and decision-making in pension policy, and the model of rationality that underpinned it.
Source: Kendra Strauss, Rational Idealism, Uncertain Reality: The context of choice and UK pension welfare, School of Geography and the Environment/University of Oxford (01865 271922)
Links: Paper
Date: 2006-Feb
An employers' organization made proposals designed to help tackle the pensions crisis without compelling business to contribute to staff pension schemes. They said that automatic enrolment without compulsion was the best way of increasing pensions saving without undermining existing provision.
Source: Responding to the Pensions Commission Final Report, Confederation of British Industry (020 7395 8247)
Links: Report | CBI press release | TUC press release | BBC report
Date: 2006-Feb
The insurance industry proposed 'partnership pensions as a private sector alternative to the scheme recommended by the Turner Commission. It said that partnership pensions would have lower start-up and running costs than the Turner scheme for at least the first ten years; there would be new portable personal accounts for employees, supported by auto-enrolment and employer contributions; and the pensions would be governed by an economic regulator to keep charges, incentives, and contribution levels under review.
Source: Press release 10 February 2006, Association of British Insurers (020 7600 3333)
Links: ABI press release
Date: 2006-Feb
A discussion paper said that each policy option proposed by the (official) Pensions Commission required changes that were too large for the policy to be implemented on its own. It also said that immigration was an inefficient and ineffective way of salvaging an ageing society - the required replacement migration levels were abnormally high and too volatile for it to be considered as a viable policy alternative.
Source: Krishna Kotecha, The UK State Pension System: Analyses of proposed reforms and the viability of immigration based policies in response to ageing demographics, Pensions Institute/City University (020 7040 8600)
Links: Discussion paper
Date: 2006-Jan
New regulations meant that, from April 2006 (subject to Parliamentary approval), employers of more than 150 employees would not be able to make major changes to their pension scheme without first consulting the scheme s members.
Source: Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006, Draft Statutory Instrument, Department for Work and Pensions, TSO (0870 600 5522)
Links: Text of Draft Statutory Instrument | DWP press release
Date: 2006-Jan
In 2003-04 the number of people accruing state second pension was 20.7 million. This represented a 4 per cent increase on the 2002-03 figure of 19.9 million.
Source: Second Tier Pension Provision: 1978/79 to 2003/04, Department for Work and Pensions (020 7962 8176)
Links: Report
Date: 2006-Jan
A paper said that the pension system was failing at all levels, including at the level of occupational pensions: declining coverage rates, the retreat of plan sponsors from final-salary schemes, and the surprisingly low rate of provision of defined contribution schemes suggested that the second pillar of retirement income provision might not last another generation.
Source: Gordon Clark, The UK Occupational Pension System in Crisis, Working Paper 06/03, School of Geography and the Environment/University of Oxford (01865 271922)
Links: Paper
Date: 2006-Jan
An article examined emerging tensions in the management of welfare. It said that proposals for welfare reform, particularly retirement pensions, hinged on their ability to promote the idea of the 'consumer citizen' and to undermine traditional ideas of citizenship rights.
Source: Kirk Mann, 'Three steps to heaven? Tensions in the management of welfare: retirement pensions and active consumers', Journal of Social Policy, Volume 35 Issue 1
Links: Abstract
Date: 2006-Jan
New regulations meant that, from 6 April 2006, where a member left an occupational pension scheme with at least three months' qualifying service, but with no right to a pension from the scheme, they would be entitled to receive either a cash sum to be transferred to another pension scheme, or to a refund of their contributions (rather than the existing right solely to a refund).
Source: Occupational Pension Schemes (Early Leavers: Cash Transfer Sums and Contribution Refunds) Regulations 2006, Statutory Instrument 2006/33, Department for Work and Pensions, TSO (0870 600 5522)
Links: Text of Statutory Instrument | DWP press release
Date: 2006-Jan
A think-tank report said that allowing limited earlier access to money saved in pension schemes under specific circumstances, such as in times of financial hardship, might increase the number of people saving in a pension scheme and the amount they saved.
Source: Daniela Silcock, Sean James and Adam Steventon, Would Allowing Early Access to Pension Savings Increase Retirement Incomes?, Pensions Policy Institute (020 7848 3744)
Links: Report | PPI press release | Professional Pensions report
Date: 2006-Jan
A paper presented evidence on the persistency of contributions to individual pensions. Changes in income and consumption needs (for example, becoming unemployed or the arrival of a new baby) increased the probability of lapse: but household income also mattered, suggesting that pensions might be less affordable for those on low incomes, even in the absence of shocks.
Source: Sarah Smith, Persistency of Pension Contributions in the UK: Evidence from aggregate and micro-data, Working Paper 06/139, Centre for Market and Public Organisation/University of Bristol (0117 954 6943)
Links: Working paper
Date: 2006-Jan
The Pensions Act 2008 was given Royal assent. The Act provided for automatic enrolment into a qualifying workplace scheme from 2012; the introduction of a new personal accounts scheme designed for those employers who did not run a pension scheme; and further simplification to the additional state pension, by consolidating the rights people had built up under graduated retirement benefit, the state earnings-related pensions scheme (SERPS), and the state second pension into a single cash sum.
Source: Pensions Act 2008, Department for Work and Pensions, TSO (0870 600 5522)
Links: Text of Act |DWP press release | Professional Pensions report
Date: 2006-Jan
A paper considered the nature and timing of retirement, and assessed the likely effect of measures to reverse declining labour market activity among older men.
Source: James Banks and Sarah Smith, Retirement in the UK, Working Paper 06/140, Centre for Market and Public Organisation/University of Bristol (0117 954 6943)
Links: Working paper
Date: 2006-Jan